Covid has amplified demand for Luxury Homes

In this exclusive interview with Torbit Realty, Aakash Ohri, Group Executive Director and Chief Business Officer, DLF Home Developers Ltd. talks about the performance of residential real estate sector and DLF in 2021, pick up in luxury housing, DLF’s business plans for the new year and emerging home trends in 2022. Excerpts….. Vinod Behl 

How do you look at the real estate industry and DLF’s performance in 2021 for the residential business?

The pandemic has prompted the industry to ‘reflect upon, reassess and to rethink’ along the lines of gearing up for the new normal. The past two years have actually brought the fence sitters to the market. The prevalent demand for real estate has established that there is an appeal for stable assets in an otherwise unstable economy. Since the beginning of 2021, there has been sustained sales growth across major Indian metropolises.  NCR saw a sizeable jump in demand for homes with a flurry of new launches across product segments and categories. The year also observed a transformation in the homebuyers’ preferences. The pandemic has radically transformed the definition of comfortable living.

The residential business continues to tread on its growth trajectory with healthy traction and strong demand momentum across segments and geographies. Our new sales bookings exhibited strong performance during the second quarter and stood at Rs 1,512 crore, reflecting a year-on-year (YoY) growth of 77%. The Camellias clocked a record new sale of Rs 1,037 crore in the second quarter. If you see the performance of Camellias in the last 18 months, there has been a steady growth. Demand for our new products of independent floors across Gurugram market continues to witness healthy absorption. The monetization of our completed inventory across markets continues to gain traction.

One of the most significant trends this year was the influx of demand for homes in our luxury and superluxury segment. Today’s discerning buyers have directed their purchase decisions towards luxury homes, wherein earlier they would invest in other asset classes or luxury goods.

 What are plans for 2022 in terms of residential business, new launches and the overall focus. Will you continue with your ‘Build & Sell” model?      

We are encouraged by the improving demand trends in the residential markets and expect these trends to remain there for the long run. Given this positive outlook, supported by improved fundamental drivers, we continue with our endeavor of bringing new offerings across segments and geographies. With increasing volumes and well-calibrated price hikes, we expect further margin expansion for our projects.

In future we plan to launch a mix of ready-to-move-in and under construction housing units depending on demand and opportunity. In the past decade, we have built our strength of being able to offer ready to occupy homes with all operational amenities which allows the customer instant ownership of a home. We will be keeping both the ready inventory and the under-construction units ready and will take a call on which units to launch in the market and at which part of the cycle. The decision will depend upon opportunity and demand.

One of the biggest launch in 2022 will be a residential project, a joint venture with Singapore sovereign fund GIC in West Delhi at Moti Nagar. We are very well prepared and hoping to get a good response. We will also continue to launch various products across India including Panchkula, Chennai and independent floors in Gurgaon.

The year 2021 saw a major uptick for DLF as far as its super luxury portfolio sales is concerned. What has primarily driven this demand for high ticket value products that too in a year of pandemic?

 The demand for luxury homes in India was predominantly driven by only a select few home buyers, but COVID-19 has altered that reality and accelerated the demand like never before. In India, While there has always been an appetite, people preferred other asset classes to invest in, which has now significantly changed since the onset of the pandemic. Also, over a period, of time, the connotation of luxury homes has changed and evolved. Today, luxury homes are no more about the brick and mortar but the overall living experience, an exclusive address that is complimented with unmatched resort-like living, provided within the privacy and comfort of one’s home. It has become a statement lifestyle that is supported with a host of amenities and facilities in fully integrated, self-sufficient and secured residential condominiums (not service apartments), giving   the residents an opportunity to pursue their passion – making it the true definition of today’s luxury. Another aspect that has added to this demand is the emergence of the outdoor living experience in luxury apartments, which adds to the luxury quotient. And to top it all is an incredible view of manicured greens and urban forests. Luxury home buyers want a connection with nature, more than ever before. Some homebuyers have also invested and continue to invest in high-value holiday homes as an extension of their current homes, set in the lap of nature, away from metros, as they look for social distancing, health, hygiene, safety, and comfort all in one space, which has also amplified the luxury housing demand in the past few quarters.

In a major turnaround, the year 2021 saw the return of plotted development. Has the home buyers’ interest shifted from high rises to low rises? If yes, why is it so and will this trend last?

Despite the proliferation of ready-to-move-in properties, independent floors continue to remain an attractive investment option due to lower investment costs, vis-à-vis ready-to-move-in properties, or independent villas/plots. There is a section of the buyers, which does not necessarily enjoy an unnecessary influence of the community, such buyers like certain privacy and individuality, and thus prefer

independent floors over group housing. The trend has led to an influx in demand for plotted developments. Independent floors have also witnessed a manifold appreciation in investment in the past few years. Today independent floors are not just a good investment option, but also promise an opulent lifestyle. Furthermore, COVID-19 has pivoted focus on organized developers, which will help mitigate risks for buyers on the purchase of land. Plotted residential developments by known and trusted brands also ensure the provision of civic amenities such as water, electricity, sewage system, walkways, and much more alongside a strong social infrastructure to support and enable the community to thrive, making it an attractive investment option in real estate. ”

Since October 2020 we have launched premium independent floors across DLF City in Gurugram as well as DLF Gardencity in New Gurgaon and have received a phenomenal response from the market. The independent floors launched from October 2020 in different phases at DLF City, Gurgaon, started with Rs. 11,000 psf in October and have gone up to Rs 17,000 psf in subsequent launches to date. These floors are conceptualized considering the space requirement of families looking to re-establish themselves in upscale neighborhoods in Gurgaon to live independently without compromising on proximity to their loved ones.

What important trends you foresee in the residential real estate in 2022?

The year 2022 will be an opportunity to reconsider everything – how we build communities and addresses to be even more resilient, healthy, attractive, sustainable, and creative at the same time. The industry will continue to be buoyant and as we advance to the post-COVID phase, sustainability will be the centerpiece of the real estate narrative. Instead of price point, the focus will be on the ability of homes to enable deeper emotional connection with oneself and foster a sense of community.

In future once the pandemic starts to subside, to turn away from isolation and fear, and to turn towards a newer appreciation for community, buyers would look for spaces that bring them together through common experiences within the safety and comfort of their own neighborhood. At the same time, there will be a shift to a demand for spaces that better reflect a new way of chasing life, that will include superior personal space.

Also, now that a home is looked upon as a space that can accommodate all the multi-functional facilities and amenities one aspires for, people desire more area to feel better, liberated, happy, and realise their passions and hobbies after a tiring day. The trend has led to an influx in demand for plotted developments.

Likewise, second homes, once considered a luxury, have become a necessity for a growing segment of consumers with greater spending capacity and need to have an extension of their current homes but in the lap of nature, away from dense cities.

 BLURB: One of the biggest launches of the DLF in 2022 will be a residential project in Moti Nagar, Delhi